New Alto Launch

New Alto Launch, NEW DELHI – Maruti Suzuki India Ltd., the country’s largest automaker by sales, said on Wednesday it is working to advance a program of capacity expansion to meet growing demand in this rapidly growing market for automobiles.

The local unit of Suzuki Motor Corp. announced in January a plan to increase capacity at its plant in Manesar in the northern state of Haryana to 250,000 cars a year in April 2012. Maruti plans to invest 17 billion rupees (368.7 million y) in the project to increase its annual capacity to 1.25 million cars.

“I’m working with my team to see how far we can advance the implementation plan,” Shinzo Nakanishi, managing director of Maruti said in a press conference to present a new version of best-selling model of the company, the Alto small car with a more powerful engine and low fuel consumption.

Mr. Nakanishi declined to give details on the program of capacity expansion.

Maruti has two factories in Haryana – in Gurgaon and Manesar. Gurgaon factory can produce 700,000 cars a year, while Manesar plant can make 300,000 cars a year.

Increased capacity will help to overcome the obstacles Maruti production and produce new models and competition from existing manufacturers and new car such as Hyundai Motor Co., Ford Motor Co., Volkswagen AG and Nissan Motor Co. is intensifying.

“Most of our models are in the waiting period,” said Mayank Pareek, executive director of Maruti sales and marketing. “We have not been able to meet demand due to restriction of production. As a result, our market share fell in the quarter (April-June).”

Maruti sold 384,181 vehicles between April and July 2010, an increase of 26% over the previous year. Sales for the year ended March 2010 rose 29% to a record 1.02 million vehicles.

The company is introducing new models to maintain its control of nearly half the car market in India. The automaker launched the new Wagon-R car small in April. That followed three pitches in the last fiscal year – the Ritz and back windows of the van and multi Eeco Style.

The new High-K10 presented Wednesday has a gasoline engine of 998 cubic centimeters, the so-called K-Series, Maruti, he said, adding that it will continue selling the current High which has a 796cc petrol engine.

The automaker sells seven models of small cars, including the Swift, the A-Star and El Alto. The company produced one million vehicles in the year ended March 31, two thirds of which are small cars.

“There are a growing number of first-time buyers who want more power, performance and attitude in his car, without having to stretch all the way to buy a car premium segment,” Mr Nakanishi said. “With K10, High hope to sell even higher numbers,” he said, but declined to give any sales forecast.

Maruti currently sells over 20,000 units of Alto each month. It sold 240.00 units of cars in the fiscal year ending March 2010. The company claims that the High-K10 will provide a mileage of 20.2 miles per gallon.